IMF Revises Outlook

The IMF has revised this year’s growth projections for the Dominican economy. The forecast is now for a higher growth rate of 5-5.5%. In a statement that followed the second review of the Stand-by Arrangement (SBA) approved by the IMF in November 2009, mission head Alejandro Santos said:
“The early results of the authorities’ economic program have been impressive. There is a clear economic expansion and real gross domestic product (GDP) is estimated to have grown by 7.5% in the first quarter of 2010 (year-on-year). Exports, imports, tax collections and private credit are expanding at healthy rates. While the 12-month inflation rate is above the 6-7% target of the Central Bank, this is mostly due to higher fuel and some food prices; core inflation (which excludes these prices) is still below 3% on an annual basis. It is expected that for 2010 as a whole, real GDP will grow between 5 and 5.5%, while inflation will be contained within the Central Bank’s target.”
The IMF was pleased with compliance with the SBA requirements, but said that there were still delays in implementing the electricity reforms. “The authorities have designed a strategy to improve tax collections through improvements in tax administration and rationalization of tax exemptions. The authorities have also designed a plan to achieve compliance with all Basel core principles for effective bank supervision.”

DR1 2010

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